Auto-enrolment 'causing confusion among employers'

A new survey reveals 45% of UK employers are confused about their auto-enrolment responsibilities.

The survey from the Federation of Small Businesses (FSB) has found that although smaller firms generally believe auto-enrolment will be good for their staff, many are still unclear what they need to do, when they need to do it, and how much it will cost.

More than a million small businesses are required to enrol their employees automatically into a workplace pension scheme, with the deadlines for conforming to the rules expected to pick up rapidly this month as employers reach their staging dates.

However the survey by FSB found that 45% of those asked were unclear on the rules. With 25% of those surveyed also fearing that their business might not be able to cope with the extra cost.

But The Pensions Regulator's CEO Lesley Titcomb said that so far auto-enrolment has been a success with most of 70,000-plus employers who have already set up a workplace pension saying they found the process fairly straightforward.

She said: "In the next three months, 100,000 employers have got to enrol their employees. The message to them is that they need to start early, and make a plan."

Raising Awareness

All employers are being advised that they need to offer pensions to anyone who is over the age of 22 and who earns more than £10,000 a year. This includes, for example, nannies, care workers, plumbers and bar staff.

A major advertising campaign by the Government, featuring Workie - a 10ft hairy mascot - is being run, aimed at ensuring small businesses pay attention to the new rules.

The FSB said this campaign was vital, as awareness of the rules had been so low as shown by the results of the survey. The FSB also welcomed improved information on the website of The Pensions Regulator.

John Allan, FSB National Chairman, said: "Our message for small employers is auto-enrolment is coming and will affect your business - and the sooner you get to grips with what you need to do, the better off you will be."

The FSB also said that employees should pay attention to their rights, and ensure they are being given the appropriate pension provision and contributions.